GLOBAL CAPITAL

Chinese Managers Stir Taiwan

More mainlanders are moving to the island to work. Officials fret over Beijing's influence.

TAIPEI, Taiwan — They're crossing the strait to hawk fried chicken, market cellphones and raise tasty Taiwanese pigs. And they're making Taiwanese wonder whether the economic walls distancing their island from its powerhouse neighbor -- which has 800 missiles pointed in their direction -- should be higher.

As China's wealth and economic clout expand, a growing number of mainland-born managers are turning up on Taiwan's shores, many as captains of industry.

The trend bucks the long-standing pattern of Taiwanese managers and investment moving to China. It's also accentuating a long-simmering debate here about the future of Taiwanese manufacturing, the risk of economic "hollowing out" and ensuring that the island doesn't become a victim of Chinese economic blackmail.

"These senior managers are tough, aggressive and don't give up until they win," read a recent issue of Taiwan's Business Weekly magazine. "They're like Tibetan mastiffs, the king of dogs."

Asian nations are generally willing to let business flow even when political relations deteriorate.

China attracts about 70% of Taiwan's outbound investment and at any given time is hosting an estimated 1 million of the island's businesspeople. Even as the two governments squabble -- they separated in 1949 after a protracted civil war -- Chinese communities trip over one another to lay out the red carpet for their counterparts from across the strait.

"We welcome Taiwanese businessmen and hope we can build up our friendship like brothers," said Liu Zhiqiang, the mayor of Jinzhou, at the opening of a recent Taiwan Week in the northern province of Liaoning that attracted 400 Taiwanese and $104 million in new investment. "Come visit us often."

The number of mainland-born managers in Taiwan is difficult to pin down, especially because many have U.S. or other foreign passports. Some published reports put the population at nearly 3,000, although that almost certainly includes many people on short-term training visas.

According to Taiwan's immigration department, 86,785 holders of Chinese passports have residency visas. That includes workers' family members and other groups.

Many work for multinational companies -- which are relatively free to bring over mainland staff -- including fast food giant KFC, wireless communications company UTStarcom, New York Life Insurance and Thailand's Charoen Pokphand Group, a producer of ham, bacon and garlic chicken.

"We're warning our companies to step up to the competition and advising workers that they should get used to having a mainland manager," said Luo Huai-jia, vice president of the Taiwan Electrical and Electronic Manufacturers Assn., which has been lobbying the government to relax immigration restrictions. "We're going to see more and more coming."

Wary of being overrun, the government has kept a tight rein on visas. Executives grouse at delays and inflexible rules, contending that the government should embrace the trend.

"The reality is, there are 1.3 billion people in China and 23 million in Taiwan," said Peter Sutton, head of Taiwan research with brokerage firm CLSA. "It's inevitable if you run a regional business, you're going to transfer them around. We're not going to stop it. And they're going to have to live with it."

Ye Zhou doesn't look threatening. The Shanghai native, who holds a Chinese passport, lives in Taiwan and works as Asia-Pacific vice president of Alameda, Calif.-based UTStarcom.

Ye greets visitors to his Taipei office with a smile. He jokes about his golf game, talks about his love of Taiwanese food and recounts the good-natured arguments he has with his Taiwanese wife over politics.

When Ye arrived several years ago to set up Starcom's Taiwan operation, he said, some Taiwanese put up their guard upon learning that he was from the mainland.

Over time, however, as people get to know you personally, they relax, he said.

"We're all just people," he said at home in an office with a large fish tank and makeshift putting green. "It's about getting the best person for the job, no matter what passport they have."

Ye believes that it is human nature to look at outsiders warily. However, the reputation of mainlanders is improving, he added, especially compared with a decade ago, when they were often portrayed in movies as hicks. China is coming on strong, he continued, adding that Taiwan needs to sharpen its economic edge and stop wasting energy on political infighting.

"If your management team argues every day, how can you get anything done?" he said. "You're like a spider with legs moving in different directions."